On a standard NEOGEO the soundtrack is usually generated, but on the neogeo cd, the sound is pre-recorded as standard cd-audio which is about 10MB/s. So on the cartridge version the soundtrack is stored as notes which then generate the sound but the cd version is simply playing back pre-recorded music.
Uncompressed CD audio is 172.266KB/s (44100 * 2 * 2 / 1024). You're probably thinking of data per minute.
Is there a way to mod the ROM and encode the music as data like it was on the original Neo Geo. Or "brute force" it by removing the music altogether?
A ROM hack could eventually accomplish this, in the same sense that a ROM hack could eventually accomplish anything. However, what you're asking for is incredibly non-trivial and could not be automated. If there's a non-CD version to begin with then what's preventing you from playing it instead?
When you said "music", did you mean just the gameplay music, or did that include all of the sound effects as well?
This is pretty moot, since sound effects are usually not very complicated and usually don't benefit much from being sequence from other sound effects. On the other hand, NeoGeo does have ADPCM hardware so the sound effects probably do have this form of compression employed. CD-ROM devices are not capable of streaming two different pieces of audio simultaneously so the sound effects would have to be stored in their entirety in RAM before the music began playing. Using effects that take as much encoding space as audio could be RAM prohibitive, unless very few and very short ones are used.
Chances are that unless the game is heavily voiced it'll have much less play time in sound effects than music.